Retirement Provision Overtakes Unemployment as Biggest Concern

Retirement Provision Overtakes Unemployment as Biggest Concern

Retirement Provision Overtakes Unemployment as Biggest Concern

The FINANCIAL -- Retirement provision is the main source of concern for the Swiss, who believe Switzerland's most pressing political goal is to secure the future of its pension system. This issue has replaced unemployment as the top worry of the Swiss public.

These are the key findings of the latest Credit Suisse Worry Barometer. The survey also revealed that respondents consider their own jobs to be remarkably secure but see clouds on the economic horizon. The social repercussions of rising life expectancy are a cause for concern to some respondents – particularly the elderly.

On behalf of Credit Suisse, the research institute gfs.bern surveyed Swiss voters once again this year to assess their concerns and their understanding of Switzerland’s key distinguishing features. One concern has stood out among all others in the Worry Barometer ever since 2003 – unemployment. However, in 2017, retirement provision overtook this long-standing worry to rank first in the list of concerns. “There has been a significant shift in the worry hierarchy this year,” commented Manuel Rybach, Global Head of Public Affairs and Policy at Credit Suisse. “All segments of the population now appear to agree that Switzerland’s retirement provision system needs restructuring.”

Retirement provision and unemployment were both named among Switzerland’s five most pressing problems by 44% of respondents (figures rounded to the nearest whole number), with retirement provision having a slightly higher figure. Most strikingly, retirement provision has risen by no less than 16 percentage points since last year’s survey, whereas unemployment has declined over the same period – falling by as much as 12 percentage points since 2015. “The trend could see retirement provision become a topic that shapes the social climate,” observes Lukas Golder, Co-Head of gfs.bern, which has conducted the Credit Suisse Worry Barometer since 1995. “The rejection of the Pensions 2020 Reform in the referendum held after this survey was completed has done little to ease concerns. Such sentiment places strong pressure on the world of politics and administration to come up with compromise solutions that are sustainable for society.” The most frequent response to the question about Switzerland’s most pressing political objective was also the need to secure the AHV system. No fewer than 24% of respondents selected this issue in this context.

Little Concern Over Own Job

In contrast, the current debate over the loss of jobs as a result of digitalization appears to have had virtually no impact on the mindset of the Swiss people. Not only is unemployment considered by respondents to be less of a threat than in previous years but 37% of those surveyed this year consider their jobs to be very secure – the highest figure recorded to date.

Concerns about foreigners (35%) and refugees/asylum issues (19%) have receded since 2015 (-8 and -16 percentage points, respectively), and these worries now occupy positions 3 and 6 in the rankings. That said, a clear majority of respondents would still like to see immigration restricted or at least controlled. More than three out of every four voters are in favor of quotas for foreigners, while in French-speaking Switzerland the figure is as high as 91%.

Trust/Confidence: Many Losers – But Federal Supreme Court and the Banks Are on the Rise

The faith of the Swiss in their own institutions surpasses that of almost any other nation. 60% expressed confidence in the Swiss Federal Council, whereas the average figure for confidence in national government in OECD countries is just 42%. Nonetheless, Switzerland has itself suffered a slight reversal in confidence levels this year: Of the 20 most highly-placed institutions in the confidence rankings, no less than 18 have lost ground in 2017 – after rising steadily for many years. There are many “losers”: The armed forces and the Swiss National Bank experienced the greatest loss in confidence (-10 percentage points each), followed by employee and employer organizations (-9 and -6 percentage points, respectively). Further, all segments of the media (TV, radio, free newspapers, and purchased newspapers) have fallen by between 5 and 6 percentage points.

There were few confidence “winners”: They include the Federal Supreme Court, which now tops the confidence rankings for the third year in succession (66%, +1 percentage point compared to 2016). The Swiss banks have risen from 15th to 2nd place in the rankings, with their approval rating rising from 57% to 61% – no other institution has gained more trust over the last year.

National Pride: A Unifying Feature Irrespective of Political Affiliation

Although the confidence of the Swiss in their own institutions may have declined slightly, this has in no way damaged national cohesion. Quite the opposite: When asked which geographic entity they most associate with, 34% of respondents named Switzerland (previous year: 25%).

Back in 2004, 73% of Swiss were proud or very proud of their country. By 2010, this figure had risen to 82%, while the 2017 equivalent is 90%. It appears that the new, forward-looking identity based on education, research, and an internationalist approach is broadly supported – including politically. Whereas in former times it was mainly those who would describe themselves as supporters of the political “right” who were proud of Switzerland, national pride today appears to be equally shared by those on the right, left and center of the political spectrum.

Economic Situation: Subdued Assessment

The Swiss view the economic climate as being slightly worse than they did a year ago: 24% of respondents believe the general economic situation has deteriorated over the last year; just 17% believe it has improved. The Swiss also see clouds on the economic horizon: 23% believe the situation will deteriorate further – just 17% are anticipating a future improvement. However, the majority of Swiss do not perceive any clear movement in one direction or another.

The Swiss also rate their own personal economic situation as rather less positive than in 2016, and there is greater pessimism regarding the future outlook: 14% of respondents expect things to go downhill – twice the equivalent proportion last year, and a higher figure than at any time since 1995. That said, and in contrast to the assessment of the general economic situation, optimism is the more prevalent mindset here: 17% of Swiss believe things will get better, and the majority expects things to remain the same.

Older People – Concerns about Aging

As a result of advances in medicine and medical technology, human life expectancy is continuing to increase. One question asked in this year’s Worry Barometer was: “Do you have a positive or negative view of the social repercussions of greater longevity?” It is perhaps not entirely surprising that a significant majority took a positive view (68%). Nonetheless, one in four respondents believes that these social repercussions are somewhat or wholly unwelcome. While in all age groups under the age of 70, at least two-thirds of respondents took a positive view of these developments, just 55% aged over 70 responded positively, while 35% considered these developments somewhat or wholly unwelcome. Viewed across all age groups, 62% of respondents took the view that the financing of retirement was insufficient in Switzerland. This tallies with the other Worry Barometer results in this area, namely that the AHV system is the area most in need of reform.

As present, old-age nursing care insurance is voluntary in Switzerland. According to the Worry Barometer, 48% of respondents believe that old-age nursing care insurance should be mandatory. Another finding here is that 57% of respondents agree with the view that life in old age will become more comfortable thanks to automation and robots.

Identity: Is a New Switzerland Emerging?

Evidence is emerging of a change in national identity. Switzerland’s strong school/education system now tops the rankings of those characteristics that symbolize Switzerland in the eyes of respondents. In contrast, traditional aspects of the Swiss sense of identity have lost ground: In 2015, neutrality was cited by 32% of respondents as one of the three distinguishing characteristics of Switzerland; last year it was down to 15%, and this year it is lower still at 11%. The linear graph for the issue of “security” reveals a similarly negative trajectory (19%, 21%, 12%). Other features to have continuously receded in importance over the last five years include landscape/nature (10%) and home/homeland (6%). Despite direct democracy having been consistently cited as symbolic of Switzerland by almost 10% of respondents in recent years, this year’s figure was just 4%.

This reshuffling of Swiss values is also confirmed by those economic aspects of which respondents are very or fairly proud. Leading the rankings are the following: 1. international companies domiciled in Switzerland, 2. research, 3. strong Swiss brands abroad, 4. Switzerland’s international reputation for quality.

Key Findings of the Credit Suisse Worry Barometer 2017

According to 44% of respondents, the greatest Swiss concern is the AHV system/retirement provision. Which political objective is the most pressing? Here too, the most-cited response is the AHV system (24%).

Unemployment ranks second in the Worry Barometer, only just behind retirement provision. It reigned supreme as Switzerland’s greatest perceived problem from 2003 to 2016, and is still close to the top in 2017 – but unlike retirement provision, it is a receding concern.

Concerns about foreigners (35%) and refugees/asylum issues (19%) have become less pressing since 2015 (-8 and -16 percentage points, respectively). However, more than three out of every four Swiss are in favor of quotas for foreigners, while in French-speaking Switzerland the figure is as high as 91%. On the other hand, 60% of respondents cited the continuation of the bilateral agreements with the EU as their first or second priority for the future shaping of the EU-Swiss relationship – which means this option is significantly more popular than joining the EMU (first or second priority for 51% of respondents), terminating the bilateral agreements (28%) or joining the EU (21%).

Confidence: The Federal Supreme Court tops the confidence rankings for the third year in succession (66%, +1 percentage point compared to 2016). The Swiss banks have risen from 15th to 2nd place in the rankings, with an increase in approval rating of four percentage points from 57 to 61%. However, the remaining 18 of the 20 highest-ranking institutions have actually suffered a loss of popular trust: the armed forces and the SNB each by 10 percentage points, and employee and employer organizations by 9 and 6 percentage points, respectively.

What things symbolize Switzerland? The country’s strong school/education system ranks top of the list this year (13%). A number of traditionally strong distinguishing features of Swiss identity such as neutrality, security, landscape/nature and home/homeland have lost ground in recent years.

Economic aspects of which the Swiss are very or fairly proud: 1. international companies domiciled in Switzerland, 2. research, 3. strong Swiss brands abroad, 4. Switzerland’s international reputation for quality.

In 2004, 73% of Swiss voters were proud or very proud of their country. In 2010 the equivalent figure was 82%, and today the figure is as high as 90%. There are now virtually no differences between the right, left, and center of the political spectrum.

62% of respondents take the view that the financing of retirement is insufficient in Switzerland. 57% are convinced that life in old age will become more comfortable thanks to automation and robotics.

The individual’s economic situation and the general economic situation are viewed as less positive than in 2016 – even if an absolute majority believe the situation has not changed and expect no clear movement in either one direction or the other over the next 12 months.